On Nov. 5, 2014, federal Court of Appeals for the Ninth Circuit in California ruled for the plaintiff out-of-network provider’s ERISA right to sue United Healthcare on behalf of patients for out-of-network deductible waiver claim denials, because “Defendants point out that Spinedex has not sought payment from its patients for claims, or portions thereof, that United and the Plans have refused to pay.” ERISAclaim.com demystifies this court decision for all out-of-network patients and providers, with increasing number of the out-of-network deductible waiver claim denials.

On November 6, 2014, ERISAclaim.com announced new ERISA out-of-network claims specialist special training programs in accordance with this federal appellate court decision: “It also included a statement in which patients acknowledged that they were liable for all costs of the services rendered…….But the patients’ injury in fact after the assignment is irrelevant. As assignee, Spinedex took from its assignors what they had at the time of the assignment. At the time of the assignment, Plan beneficiaries had the legal right to seek payment directly from the Plans for charges by non-network health care providers.” according to court document.

“Regardless of upfront deductible or co-pay collection after the assignment, an out-of-network provider has ERISA right to sue for payment from an ERISA health plan, if with a valid patient ERISA assignment and patient legal obligation to pay the provider,” says Dr. Jin Zhou, president of ERISAclaim.com, a national expert on ERISA appeals and compliance. “Deductible waiver denial has been the No. 1 out-of-network claim denial, with [an] increasing number of out-of-network patient bankruptcies as a result of the national epidemic disastrous three-invoice patient collections.”

This historical out-of-network case is a classic example of the most popular out-of-network claim denials today in America: the health plan will usually deny all out-of-network claims for alleged out-of-network deductible and coinsurance waivers by a provider, and allegedly the patient “has not suffered injury in fact”, then the health plan is not liable for any payment to the provider, explains Dr. Zhou.

In Spinedex, United Healthcare denied all out-of-network claims:

“Defendants argue that because Spinedex has not sought payment from its assigning patients for any shortfall, those patients do not have the “injury in fact” necessary for Article III standing. Defendants argue that since Spinedex stands in the shoes of, and can have no greater injury than, its assignors, Spinedex has not suffered injury in fact,” according to court documents.

The court rejected the Defendant United argument, and explained that an out-of-network provider has ERISA rights for payment and to sue, whether a provider balance bills a patient, after the assignment when seeking payment from the health plan, is irrelevant. The court explained why:

“We are aware of no circuit court that has accepted [the] defendants’ argument. …… The flaw in [the] Defendants’ argument is that they would treat as determinative Spinedex’s patients’ injury in fact as it existed after they assigned their rights to Spinedex. We agree with [the] Defendants that Spinedex has not sought to recover from its patients any shortfall in Spinedex’s recovery from the Plans, and that the patients have not suffered injury in fact after assigning their claims. But the patients’ injury in fact after the assignment is irrelevant. As assignee, Spinedex took from its assignors what they had at the time of the assignment. At the time of the assignment, Plan beneficiaries had the legal right to seek payment directly from the Plans for charges by non-network health care providers. If the beneficiaries had sought payment directly from their Plans for treatment provided by Spinedex, and if payment had been refused, they would have had an unquestioned right to bring suit for benefits,” according to court documents.

While Defendant United Healthcare prevailed in certain other claims, the Ninth Circuit concluded:

“We hold that Spinedex had Article III standing to bring benefit claims against Defendants as assignee of its patients. Its injury in fact is the same injury its assignees had at the time of the assignment.” according to court document.

The best explanation, for out-of-network ERISA patient protections, is from DOL Obama administration’s Amicus Brief and oral arguments in this case:

“Thousands of healthcare claims are made in this country every day, and some are litigated, and yet no circuit court has ruled that providers must first bill their patients before they may enforce legitimately assigned benefits claims. …. Limiting physicians’ first recourse to their patients will have chilling effects both on providers and plan participants. Participants may forgo or delay vital healthcare because they cannot finance or they cannot pay for their care, and providers may limit their care to those participants whose health plans have previously paid properly assigned healthcare claims or participants who are able to first to pay for the care, or the provider can recognize as creditworthy.” according to court audio records.

Located in a Chicago suburb in Illinois, for over 14 years, ERISAclaim.com is the only ERISA & PPACA consulting, publishing and website resource for healthcare providers in the country. ERISAclaim.com offers free webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action litigation support. Dr. Jin Zhou is regarded as the industry “Godfather of ERISA claims” for healthcare providers.

For any questions, please contact Dr. Jin Zhou, president of ERISAclaim.com, at 630-808-7237.